A bioartifical pancreas (BAP) remains a promising approach for treating insulin-dependent diabetes. Several obstacles to the clinical implementation of a BAP remain, including hypoxia following implantation. Within native pancreatic islets, CXCL12 and glucagon-like peptide-1 (GLP-1) act in a paracrine fashion to promote the survival, function, and proliferation of β-cells. This work sought to investigate if the presentation of CXCL12 and delivery of a GLP-1 receptor analog, Exendin-4 (Ex-4), alone and in combination, conferred pro-survival and insulinotropic effects on an encapsulated β-cell line, βTC-tet, cultured under hypoxic conditions of 7.6 mmHg O2. Our findings indicate that presentation of CXCL12 in the encapsulation matrix completely abrogated apoptosis under hypoxic conditions. Delivery of Ex-4 increased insulin secretion rate under both normoxic and hypoxic conditions, and additionally reduced apoptosis under hypoxic conditions. Furthermore, presentation of CXCL12 combined with Ex-4 delivery significantly increased insulin secretion rate under hypoxic conditions compared to delivery of Ex-4 alone. These findings demonstrate that the presentation of CXCL12 combined with the delivery of Ex-4 may constitute a promising strategy for supporting β-cell function and survival following transplantation. Biotechnol. Bioeng. 2013; 110: 2292–2300. © 2013 Wiley Periodicals, Inc.